Grover J. DUFF, William P. Copple, James R. Heron, F. L. Christensen and Milton Reay, as members of and constituting the Arizona State Highway Commission and William E. Willey, the Arizona State Highway Engineer, Petitioners, and Peter Kiewit Sons' Co., a Nebraska corporation, Intervenor,
Jewel W. JORDAN, individually, and as Arizona State Auditor, Respondent.
[82 Ariz. 229] Robert Morrison, Atty. Gen., for petitioners.
Rawlins, Davis, Christy, Kleinman & Burrus, and Peter Kiewit, Jr., Phoenix, for intervenor.
R. G. Langmade, Phoenix, for respondent.
The Arizona State Highway Commission and William E. Willey, its engineer, petitioned for writ of mandamus against Jewel W. Jordan, individually and as state auditor. We issued alternative writ and because an emergency existed, we by minute entry ordered the alternative writ be made peremptory with opinion to follow.
The state legislature regularly convened in January, 1956, appropriated for the fiscal year of July 1, 1956 to July 1, 1957, exclusively for the construction of state highways
any balances and collections in the state highway fund in excess of certain specific appropriations. In June, 1956, the state highway commission adopted a construction and rights of way budget in the aggregate amount of $40.915,500 for the ensuing fiscal year as required by the provisions of A.R.S. § 18-135. Included therein was a construction project (Item 95, page 16) known as the Mule Pass Tunnel and a contemplated expenditure therefor in the sum of $1,475,000. In January, 1957, pursuant to advertisement and bids a contract was entered into with Peter Kiewit Sons' Co., a corporation, for the construction of the project for the sum of $1,983,659 subject to certain conditions and exceptions hereinafter related. The contract contained the following provisions:
'Article VII-Payments: For and in consideration of the faithful performance of the work herein embraced, as set forth in the Contract Agreement, Specifications, Special Provisions, Bidding Schedule and all general and detailed Specifications and Plans, which are a part hereof, and in accordance with the directions of the State Highway Engineer and to his satisfaction or his authorized agents, the said State of Arizona agrees to pay to said Contractor the amount earned, computed from the actual quantities of work performed, as shown by the estimates of the State Highway Engineer, and the unit prices named in the attached Bidding Schedule and Supplementary Agreements made a part hereof, and [82 Ariz. 230] to make such payments in the manner and at the times provided in the Specifications hereto appended.'
'In the event contract unit prices indicate a total cost of the contract in excess of the funds programmed for the contract, the length of the contract may be shortened, so that the total cost of the work will conform to the funds allotted thereto.'
'Article VIII-It Is Expressly Understood and Agreed that no work shall be done nor any obligations incurred under this contract during the fiscal year 1956-1957 in excess of the funds programmed and budgeted for this project for the fiscal year 1956-57.
'It is Further Understood and Agreed that all work required to be done under this contract in excess of the funds now appropriated and budgeted for this project shall not be done nor any obligation incurred therefor until such time as the Legislature appropriates the additional funds and the same are budgeted for this project by the Arizona Highway Commission and in that event the parties hereto are bound to continue performance of this contract to the extent permitted by the funds so appropriated and budgeted.
'In the event that no funds are appropriated or budgeted for this project for the succeeding fiscal year, then this contract shall be null and void, except as to that portion for which funds have now been appropriated and budgeted therefor, and no right of action or damages shall accrue to the benefit of the parties hereto as to that portion to the contract that may so become null and void.
'It Is Also Understood and Agreed that this contract is subject to A.R.S., Section 18-134, Section 18-135 and Section 18-136, together with all other limitations pursuant to the applicable laws of the State of Arizona relating to public contracts and expenditures.'
On January 22, 1957, there remained unencumbered of the budgeted item for this project the sum of $1,390,000 ($85,000 thereof having been theretofore expended) and the highway department submitted to the respondent auditor an encumbrance document requesting her to encumber the sum of $1,325,000 for the payment of claims to accrue under the provisions of the contract. The respondent refused the request giving as a reason for her disapproval the provisions of sections 35-152, 35-153 and 35-154, A.R.S. The contractor entered into the performance of the contract and for work
done a claim was regularly submitted for the sum of $15,723.90. The claim was ...